Disability Insurance
You probably have insurance on your car or home, but what about the source of income that pays for it? You depend on your paycheck for many things, but what if you’re suddenly unable to work due to an accident or illness? How will you put food on the table, pay your mortgage, or heat your home? Disability insurance can help replace the lost income and make a difficult time a little easier.
Short Term Disability – Voluntary Long Term Disability Insurance
- Funded 100% by Fireclay, but you must sign up to choose your recipients.
- Accident Benefits Begin The period of time you must be disabled before benefits begin: 8th day
- Sickness Benefits Begin The period of time you must be disabled before benefits begin: 8th day
- Benefit can last up to 12 weeks
Long Term Disability – Voluntary Long Term Disability Insurance – Guardian 66 2/3%
- Funded 100% by Fireclay, but you must sign up to choose your recipients.
- Accident Benefits Begin: How long you must be disabled before benefits begin: 91 days
- Sickness Benefits Begin The length of time you must be disabled before benefits begin: 91 days
- Elimination period of 90 days before the start of the benefit. The benefit can last depending on the disability until the normal Social Security retirement age.
- Even if you never miss a single day of work due to an accident or illness, you’ll have peace of mind knowing that you can replace at least a portion of your income if you ever need to.
Life Insurance
Your family depends on you in many ways and you have worked hard to ensure their financial security. But if something happens to you, will your family be protected? Will your loved ones be able to stay home, pay bills, and prepare for the future? Life insurance provides a financial benefit that your family can depend on. And getting it up and running is easier, more convenient, and more affordable than doing it on your own. If you have financial dependents—a spouse, children, or elderly parents—having life insurance is a smart and responsible decision. Enroll today to secure your future!
- Fireclay Tile automatically provides full-time employees with basic life insurance coverage, through Guardian, in the amount of 100% of their annual salary, up to a maximum of $150,000 with a minimum amount of $10,000.
- Funded 100% by Fireclay, but you must sign up to choose your recipients.
- If you die before your dependents, this benefit can help replace your income.
Life Insurance – Voluntary Purchase
- Employees may purchase additional life insurance for themselves up to $500,000 in $10,000 increments.
- Life insurance may also be purchased for a spouse up to $250,000 in $5,000 increments not to exceed 50% of the amount elected by the employee. A child benefit can be purchased up to $10,000 in $5,000 increments.
- As a company, we must have at least 25% of team members signed up. If this minimum is not understood, the benefit will not be available. If you are interested, please choose it under Open Enrollment
Going without pay can be devastating, particularly if your family depends on a single paycheck. We don’t like to think about what would happen if we got sick or hurt, but if you’re not financially prepared, long-term illness or disability can cause financial hardship in a heartbeat.
Many Americans underestimate the possibility of an illness or injury that prevents them from working. Yet more than one in four Americans in the workforce experience a disability before reaching retirement age, according to the Social Security Administration and the Council for Disability Awareness. For those with physically demanding jobs, the risk of injury or disability may be even greater.
Does Social Security cover disabilities?
Many people believe that Social Security will cover their needs if they get sick and can’t work. However, Social Security disability benefits are based on the amount paid into the system over time. As of 2021, the average monthly Social Security check is $1,543.
If you are injured on the job, you may be eligible for workers’ compensation benefits. However, the rules and availability of these compensation benefits vary by state and typically cover only a percentage of your salary.
Although Social Security and workers’ compensation benefits can help in the event of an injury, they are generally not a substitute for wages earned. That’s why disability insurance can be beneficial.
Disability income insurance can help you prepare for the worst without sacrificing your savings and investments. There are different types of plans available and it is important that you understand your options and evaluate your personal needs before choosing a disability income insurance policy.
Short term disability vs. long term disability
There are two main types of disability income insurance available for purchase: short-term disability and long-term disability.
Short-Term Disability Insurance – Replaces a portion of your wages if you are temporarily unable to work due to injury, medical complication, debilitating illness, or even childbirth. Short-term disability benefits generally go into effect either immediately, although some plans require a brief elimination period that lasts anywhere from one day to four weeks. Depending on your policy, short-term disability benefits can last from six weeks to two years.
Long-term disability insurance covers more than short-term. This coverage insures your income against the risk of a chronic or life-threatening condition and can replace a portion of your income for several years or for the rest of your life, depending on the terms of your policy. In addition, a long-term disability policy can be used to protect the income of high-earning professionals working in specialized industries who are forced into an unexpected job change due to injury. For example, a surgeon with a hand injury whose ability to perform the surgery has been impaired.
Finding the Right Disability Insurance Policy
Like health insurance, disability insurance can be purchased individually or through an employer-sponsored plan. Before deciding which type of policy is right for you, it’s important to understand the benefits and drawbacks of each option.
Employer-Sponsored Disability
Insurance Group disability insurance plans offered by an employer through a professional association may be less expensive than a disability insurance plan purchased on the private market. Premiums can usually be conveniently deducted from your salary, and some plans can also be transferred in the event you leave the company. Also, many employer-sponsored insurance plans do not require you to prove your ability to obtain insurance. “If you’re older or have a pre-existing health problem, that’s a plus,” says Jim Nonnengard, president of Regions Investment Services. “I usually tell my clients to get the highest level of coverage they can from their employers.”
Private Insurance
If you are self-employed, if your income depends on a commission or certain production, or if your employer does not offer you disability insurance coverage, you may need individual insurance coverage. However, there are also other reasons to go for individual coverage. For some people, the coverage provided by their employer is not enough to meet their needs. If you recently bought a home or have a growing family, for example, you may prefer additional income protection.
Determine your coverage needs
When evaluating your disability income insurance coverage, it is important to review your policy very carefully to understand how income and wages are defined, since the insured amount of your wages under a disability insurance policy varies by plan. Your benefit amount may be calculated based on your take-home pay (your yearly salary after taxes have been taken out), and some plans limit the amount you can earn each month. It is also important to note that bonuses or commissions may not be included.
Once you’ve determined the potential payment, figure out if your policy will be enough to cover your mortgage and bills for an extended period of time, and consider whether it will be enough to keep you in good financial standing. If the insurance payment is equal to your annual salary times ten, that’s a great starting point, but you may need more if you have significant debt or a large family.
Finally, it is also important to take inflation into account. “A million dollars may sound like a lot of money, but you have to consider how much it’s going to be worth 20 or 30 years from now,” Nonnengard says.
Evaluate your policy
The cost of disability insurance depends on many factors, such as your income and debts, your age and health, and your family’s future needs. Disability insurance premiums are calculated based on various factors such as your age, gender, the type of work you do, and what portion of your salary you want to insure. For example, the premium an office worker pays is likely to be less than what a firefighter pays. And because short-term disability claims are often related to pregnancy complications, women of childbearing age may also have to pay higher premiums.
When evaluating a disability insurance policy, consider these additional policy elements:
- Elimination Period – The length of time you must wait before you can enjoy benefits.
- Benefit Period: The maximum period in which you will receive benefits. Your policy’s benefit period can be defined in a variety of ways: for a set number of years, until you reach a certain age, for your entire life, or by some other definition.
- Benefit Amount: The amount expressed in cash to be received for which you are eligible. As with any type of insurance, the more significant the amount of coverage, the more expensive the policy will be. If possible, look for a policy that allows you to adjust benefits to fit your cost of living.
- Occupation: Some policies will continue to pay benefits if you are unable to return to your current occupation, while others will stop paying if you are able to return to a job commensurate with your education and experience.
- Guaranteed to renew and non-cancelable: If it’s available and you can afford it, look for a policy you can keep as you age without the risk of the insurer canceling it or raising your premium.
- Partial Disability Rider – A partial disability rider will allow you to collect a portion of your benefits if you return to work part-time.
Finally, remember that when it comes to purchasing disability insurance, it’s best to do so sooner rather than later. Because it’s harder and more expensive to get insurance as you get older, keeping the plans you bought when you were younger can save you money and offer more protection in the future.
